 Oil Prices and Urban Housing DemandWilliam Larson and Weihua Zhao (weihua.zhao@louisville.edu) Real Estate Economics, 2020, vol. 48, issue 3, 808-849 Abstract: We develop a model of a monocentric, oil‐exporting city. The model predicts a “twist” (rotation combined with a level shift) of the house price gradient with an oil price change due to the combined producer price and transportation cost effects. Empirical findings support the predictions, with house price changes positively linked to the price of oil in cities specialized in oil and gas‐related industries, and negatively linked in suburban areas of all cities. These results quantify the large and differential risks to house prices associated with oil price changes both within and across cities. Overall, estimates suggest a 50% change in the price of oil results in a city‐wide house price change of 15% over five years in a city specialized in the production of oil (export employment share of 50%), whereas house prices for units greater than 15 miles from the city‐center change in relative terms by −1.5% over the same period. Date: 2020 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:bla:reesec:v:48:y:2020:i:3:p:808-849 Ordering information: This journal article can be ordered from Access Statistics for this article Real Estate Economics is currently edited by Crocker Liu, N. Edward Coulson and Walter Torous More articles in Real Estate Economics from American Real Estate and Urban Economics Association Contact information at EDIRC. |
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